Boeing Ends 2010 on a High Note

The Boeing Company (BA - Analyst Report) announced that it surpassed its year end delivery target for 2010 by two airplanes. The company delivered 462 commercial airplanes in the fiscal year driven by 376 '737 Next Generation deliveries followed by 74 airplanes of 777 variants.

The company ended the year with a strong backlog of 3,443 airplanes while net orders booked stood at 530 commercial airplanes. Air Lease Corporation booked the largest order for 737, while Emirates headed the order book for 777 during 2010.

Net orders during 2010 were mainly driven by the 737 and 777 variants, mitigating the lukewarm demand for 747 and 787 airplanes that ran into negative. The company received net orders of 486 and 46 airplanes, respectively, for 737 and 777.

Citing a hike in demand, Boeing increased the production rate of Next-Generation 737 thrice in 2010. The production rate was increased from 31.5 airplanes to 34 in May and then to 35 in June. In September it was again raised to 38 airplanes per month effective from second quarter 2013.

In March 2010, Boeing decided to increase the production rate of 777 to 7 airplanes per month from mid - 2011. The existing production level is 5 airplanes a month. In December 2010, the company again raised the production rate of 777 to 8.3 airplanes per month effective from the first quarter of 2013.

Boeing faces stiff competition in the international commercial airlines market space from France-based Airbus. As of November 30, 2010, net orders received by Airbus stood at 388 airplanes, while 461 airplanes deliveries were made during the first eleven months of the year.

We believe the strong backlog and growth in orders reflect a gradual but certain recovery of the commercial airlines market. However, delay in delivery of Boeing’s first 787 airplanes plus the negative order book for the last two years for this variant remains a cause for concern.

The Boeing Company currently retains a Zacks #3 Rank (short-term Hold rating). The company competes with the likes of General Dynamics Corp. (GD - Analyst Report) , Lockheed Martin Corporation (LMT - Analyst Report) and Northrop Grumman Corporation (NOC - Analyst Report).

Based in Chicago, The Boeing Company designs and produces commercial airplanes, defense systems and civil and defense space systems.

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